Down to the Wire – For Greece, the Global Economy, and the Gold Cartel

Following an ominous week of ugly political developments, economic news, and “tectonic market shifts,” I have three dire topics to discuss; all intertwined, and cumulatively indicative of long running “can kicking” schemes coming “down to the wire.” That said, let’s “warm up” with yet another damning quote from a man so desperate to avoid a well-deserved legacy of the “Father of Money Printing,” he’ll say anything to distance himself from Ben Bernanke, Janet Yellen, and the hyperinflationary policies he initiated. Which is why, to the chagrin of his former Washington and Wall Street partners, he has spoken more TRUTH in the past year than the 49 since penning Gold and Economic Freedom in 1966. His latest “death blow” to TPTB’s “recovery” propaganda was delivered in an interview with CNN, when he espoused “we haven’t come out of the bottom [of the housing collapse], as we are in a secular stagnation.”

Yes, “secular stagnation.” Or, better put, the irreversible economic “deformation” caused by the money printing policies he originated after the 2000-02 “tech wreck; i.e., a “mad experiment” of trying to usurp “Economic Mother Nature” by permanently avoiding recessions via the “replacement” of economic bubbles by newer, larger financial bubbles. Which, as time has revealed, are nothing but Ponzi schemes that must grow larger to survive – and do so whilst retaining confidence, despite volumes of historical evidence pointing to their failures. Not to mention, the proliferating social unrest and political instability caused by the greatest wealth disparity since feudal times; as exemplified by this damning article, of how food banks in New York – where Wall Street’s thieving ways have generated countless billions of illicit profits for the “1%” – are running out of food due to rampant real employment, and the real inflation that has caused the cost of living to surge to record levels.

To wit, yesterday’s “core” PPI – you know, the version the Fed uses to pretend inflation doesn’t exist – depicted a measly 0.1% gain in May, compared to the massive 0.5% surge illustrated by the cumulative number. In the real world, the all-time high in beef prices – up 30% in the past two years alone – actually translates to a dramatic cost of living increase. But according to MSM cheerleader AP – quite obviously, a “partner in crime” in the propagandizing of dire economic issues – “outside of increases in volatile food and energy costs, core inflation remained moderate.” Yes, “moderate”; like the 30% property tax increase I received last month; or my ADT security bill, which was raised this week by 8%. And just wait until my one year “introductory rate” on DirecTV – which we got because it’s cheaper than Comcast – expires later this summer.

Not to mention, the other forms of non-captured inflation in the system – from bank “deposit fees”; to airline baggage fees (or in Frontier’s case, the $2 you now pay for a glass of juice or soda); to the “shrink-flation” – or as this article deems it, “slack fill”; in which manufacturers attempt to “trick” consumers by putting less product in bigger boxes. And nowhere more so than cereal, where not only are the amounts of cereal dramatically reduced, but even caloric content is “massaged” to make products appear healthier than they really are. Like, for instance, Bran Flakes purporting to have less calories per serving than Cheerios. That is, until you read the fine print – that Bran Flakes’ “serving” is just ¾ of a cup, compared to a full cup for Cheerios.

And last by decidedly NOT least is the surge in adjustable rate loan payments – particularly regarding mortgages – care of the recent, market driven increase in interest rates; which in the span of a few weeks, has increased the average adjustable rate mortgage’s annual payment by more than $800! Nope, no inflation here; and by the way, the past four months’ gasoline price surge – from roughly $1.70/gallon to $2.70/gallon, is not inflation either – according to the “core” CPI, that is. It’s a good thing this week’s 10-year and 30-year Treasury bond auctions “magically” had massive bids – care of your friendly neighborhood, covertly QE’ing Fed – to (temporarily?) push rates back down. To that end, I cannot wait to see what Whirlybird Janet has to say at Wednesday’s FOMC meeting; knowing full well that no one can afford rising rates – from the aforementioned American consumer; to the IMF; the World Bank; countless corporations, institutions, municipalities, and sovereign nations; and of course, Wall Street – due to the massive financial bubbles based solely on record low rates. And particularly Deutsche Bank, the world’s largest derivatives purveyor; which, following last week’s “surprise” resignation of its co-CEOs, is being actively speculated on as potentially, the “next Lehman.”

Yes, a global economy on the edge of the abyss; and nowhere more so than its supposed “strongest link,” the United States of Economic Lies. To wit, according to the “evil Troika” of Washington, Wall Street, and the MSM, Fed “rate hikes” are imminent – no matter what real economic data shows, or how globally destructive even the most miniscule rate hike would be. Supposedly, “strong” employment data demonstrates such strength. Yet, not only does it do a miserable job at hiding its true, unfathomable weakness, but isn’t even statistically significant.

And then there’s the “pink elephant” in the room – “double seasonal adjustments” notwithstanding – that whatever “growth” the economy indeed shows is entirely due to the record inventory build that must eventually be unwound – to the detriment of future GDP readings, as well as corporate profits and balance sheets. To wit, the largest component of last month’s 1.2% retail sales “surge” – aside from higher gasoline sales due to the aforementioned price surge – was auto loans/leases sales. Which, as it turns out, were attributable as much to record manufacturer “channel stuffing” as actual retail demand – as validated by the utter collapse in the Bloomberg Consumer Comfort Index, which has not only declined for nine straight weeks, but saw its “buying climate” subcomponent plunge at its most rapid rate since…drum roll please…early 2008.

And as for said “curious case” of “strong” retail sales, recall that with last month’s announcement that the government would “double seasonally adjust” GDP reports to make them appear stronger, I wrote of how they undoubtedly will apply the same accounting fraud to other economic data. Which, it appears, Zero Hedge has indisputably uncovered in May’s retail sales report, per this extremely damning, statistically unexplainable “aberration.”

Yes, a global economy at the end of its rope; as loudly demonstrated by the renewed commodity collapse (outside of “need versus want” items like beef) which, as you might expect, is getting next to zero coverage from the MSM – despite the CRB commodity index plunging to within 6% of its 2008 spike bottom low, as even the “oil PPT” is starting to lose its un-winnable battle (hyperinflation or Middle East war notwithstanding) with the catastrophic cocktail of record global production and stagnating demand. And god help us all – at least, the 99% NOT protected with Precious Metals – if Central banks do indeed lose control of the bond market, causing rates to surge from the multi-millennia lows their deformative QE and ZIRP/NIRP schemes have fostered, to anything resembling historical norms. Which, given the world’s record debt and inflation levels, must inevitably occur.

That said, the horror of the global economic macrocosm doesn’t hold a candle to the cataclysmic microcosm of Greece, whose political, economic, financial, and social fabric are imploding like the house at the end of Poltergeist.Following this week’s €600 million of bank withdrawals, it’s hard to believe the Greek banking system hasn’t yet collapsed; which we assure you, it imminently will, when the guaranteed“Grexit” occurs. To wit, Thursday’s 7% Greek stock surge – laughably, based on another bailout “rumor” that didn’t pan out – was nearly entirely reversed Friday, as reality again set in. Not to mention, the utter explosion of PIIGS bond yields and spreads, which are (rightfully) starting to assume that “what happens in Greece” will decidedly NOT “stay there.” By the way, such irrational stock surges as we saw Thursday – aided, of course, by relentless global “PPT operatives” – are eerily reminiscent of 2008; when stocks like Lehman, Fannie Mae, Bear Stearns, and AIG constantly surged higher due to “positive rumors” that never panned out – until they eventually collapsed entirely.

And by the way, isn’t it “coincidental” that all such “rumors” – whose sources, of course, are never revealed – are always of the positive persuasion? As opposed to, say, the relentless “rumors” of the entire 2000s decade that 1) bin Laden was close to being captured and 2) the IMF was about to dump its gold, that were constantly used by the Cartel (despite such events not being in the slightest bit “gold negative”) as “cover” to smash PM prices? To that end, the only real aspect of the current, relentless PM weakness is that of PM miners; which, with each passing day of sub production cost prices, edge further towards the inevitable write-offs that will put the final nails in their balance sheets. Holding actual physical metal, I can wait out the Cartel for as long as it takes. However, for those holding rapidly dying miners, you’d better pray the Cartel is broken soon.

Which brings me to the last of today’s catastrophic troika of topics – of how the “gold Cartel” itself is running on fumes. Last week, we wrote of the “upcoming, inevitable COMEX-iddent“; as clearly, a paper exchange with essentially no physical inventory cannot indefinitely support a Ponzi scheme forever. In it, I discussed how, for the first time ever, June gold delivery demands exceeded the COMEX’s (record low) registered inventory – and whether the Cartel “rescued” the COMEX with fraudulent swaps, cash settlements, or otherwise, the fact remains that the entire world sees this fraud occurring. Throw in the fact that silver open interest now exceeds deliverable metal by a record factor of 16x; and that the parallel “fraud machine” that is the GLD ETF has seen its “inventory” drained to pre-2008 crisis levels – when prices were $230/oz lower than today; and you can see the global run on physical PMs is only accelerating; as evidenced by China plus India gold demand now exceeding global production, and Indian silver imports on pace to shatter existing records this year.

In other words, no matter where one looks, the lies, manipulation, and otherwise “trickery” used to kick the can that extra mile appear to be losing their efficacy – as the diminishing returns of returning to the proverbial well so many times become patently obvious to the world. In a nutshell, the historically large, four decade long, global fiat currency Ponzi scheme is coming “down to the wire” – as everything from “weak links” like Greece; to a gold Cartel seeking to fool people into believing the dollar is infallible; to the horrifically “deformed” global economy, are showing signs of buckling.

And when they finally burst – be it NOW or sometime not too far thereafter, if you haven’t already protected yourself with Precious Metals, it will be too late. To that end, we believe Miles Franklin can help you do so in myriad ways; and thus, invite you to give us a call at 800-822-8080, so our highly experienced team can outline your options.

20 Comments

Tom Stanley
on June 15, 2015 at 10:54 am

Andy, I’m a (small) Miles PM account holder and read your articles with much interest. My concern is with the gold ETF, GLD, mentioned in your article today. I own GLD.

So what is your take on how GLD plays out in the end? Do they not in turn, purchase gold for each share of GLD purchased? If not, and when things “unwind”, will the ETF instead pay shareholders in devalued dollars? Or will they just go “belly up” without renumeration to share holders?

We have written forever of the dangers of these (likely fraudulent) securities. They are NOT a proxy for gold and silver; and at the rate their inventories have been drained, may not have any gold left (if they still do) when the big one hits. And remember, they are administered by criminals with no auditing requirements; JPM for SLV, and HSBC for GLD.

GLD and SLV are the “poster children” of why one needs to own REAL METAL, not “paper PM investments.”

a

David
on June 15, 2015 at 4:08 pm

Tom, I still have a bit of SLV (don’t smack me Andy)with the intention of …that is the first to go if/when prices pop up. To transfer to real estate probably. Starting to rethink that as I wonder if it shuts down quickly if there is a massive and quick demand on some “Event”. If you try to hold long term I fear, as Andy, you end up with 100 people playing musical chairs…and there is only one chair.

David
on June 15, 2015 at 11:18 am

The 1.2% retail sales sounded decent to me at first. As you mentioned not all rosy. If you take out the auto sales it was actually negative. UGH! Not a peep about that from the MSM.

I know it’s dire out there. I thought the system would have imploded back in 2009/2010 so I’ve been way early to this fight. It has since crossed my mind that TPTB are very much like Hitler and the Nazi’s in 1945. They see the writing on the wall yet they keep the scheme going, down to the last woman and child left to fight. This has lasted much longer than any of us could have imagined b/c we did not think they would go to the lengths they have to kick the can. As you say, in 2011 they crossed the Rubicon. Who knows how much longer they can maintain this ruse but it will continue until they have exhausted every single means available. In my opinion, it is spring of 1945 and Hitler can hear the artillery shells from his bunker. My greatest fear is TPTB use nukes instead of the cyanide pill. These people are just as insane and delusional as the Nazi’s were.

Research the declassified FBI files on hitler living in Argentina. Why wouldn’t he have a plan of escape? The leadership knew when it was over for them and so does this current banking cartel, they can pull the plug any day since they rig all of it anyway, short the market and take what’s left of the peoples money.

RhinoHorns
on June 15, 2015 at 6:43 pm

“And just wait until my one year “introductory rate” on DirecTV – which we got because it’s cheaper than Comcast – expires later this summer”.

I was shocked when I read that. We just received our cable bill in the mail today from Charter, notifying us that our introductory 1 year rate had expired. We didn’t even know there was a 1 year special rate. They now want another $40.00/month!

I’m hoping those DirecTV or Comcast bills being talked about are purely for internet service, and not for the propaganda cable channels they carry, be it CNN or CNBC (or nowadays even the Weather Channel….who woulda thunk??).

a very interesting article. Still why do you think this time it’s gonna be very different from the crash of 2008. When the whole things starts and the bond markets collapses a lot of debt is likely to get burned down with cash becoming more valuable than real assets including gold and silver. With all that gold and silver market rigging going on, why do you think this time investors will be seeking the shelter of gold and silver rather than that of cash? In terms of a reserve currency, there is no viable alternative to the US dollar as at the moment and there is no way for world economy to go without a currency.

I didn’t say it would be different – unless, of course, it is a hyperinflation other than a crash. Which would have the same, horrifying effect on real net worths.

As for PMs, the point is that supply is falling and demand surging amidst an environment of very low inventory. This is how paper manipulations fail, as occurred in 2008 and to a lesser extent in 2011. Both of those times, the Central banks were able to “rescue” the situation with more paper – but this time around, not likely.

As for the “reserve currency,” I agree there is no alternative; that is, until the Chinese reveal how much gold they really have. That said, the dollar cannot compete with gold’s historical wealth preservation characteristic, particularly during a massive crisis.

a guy from Ukraine
on June 17, 2015 at 3:10 am

Andrew, thank you very much for your time in responding to my questions. I’ve been following closely all the information available in the opposition press in respect of what is going on in the global economy and PM market in particular and have learnt really a lot recently. Probably I wouldn’t have been after all that if it weren’t for all that mess those NWO builders did here in Ukraine. Every single world in respect of Ukraine I found at SGTREPORT for example holds true. Ever after the Maydan coup our country has been turned into a whole mess and I can feel it definitely going down the drain following the worlds’ steps and even being up-front. Well, going back to PM issue, eveyone expects China to reveal how much gold it has later this year as a prerequisite for being included in SDR basket by IMF. This step is strongly expected to have a bullish effect on PM market as nearly everyone who can make a simple math can well arrive to a conclusion that China must have hoarded no less than 10000 tons by now. While a bullish gold market response would be just a natural reaction, everything seems too simple to be true. As AVERAY GOODMAN wisely noted in “The Real Reason China Is Buying Up The World’s Gold”, by launching SGE and pricing gold in YAUN independantly from COMEX China is definetely after using soft power through shifting the power and leverage away from Washington to have a dramatic effect on its financial power. I’ll bet this is 100% true. I would would further assume that given the utterly shaking state of global economy and financial system and with due respect to milleniums-long wizdom collected by Chinese civilization China’s last intention would be to be that pin to burst those bubbles through declaring her true gold reserves. With all said above, I would assume China would rather declare just as much gold as not to have an significant effect (if any) on the already skyrocketing PM demand and consequently the US dollar value. After all, China is the largest dollar-denominated bonds holder so it is definetely not interested in accelerating the dismantlement of the US dollar. At least, at this moment.
I think China might wait for the moment when the whole thing starts crumbling under the weight of the world debt and asset values do start to go out of control so they come up with yuan as a saving boat through declaring true gold hordings. This would be like hitting three targets with one shot, one of not being the instigator of the economic collapse to come, offering a way out through a gold-backed reserve currency instead of a failing US dollar and finally through softly grabbing control over the entire world finance system.
To sum up, I dont’ think that China’s gold reserve declaration will affect gold price significantly because it appears to be contrary to China’s long-term interests.
China is definetely NOT after enriching those few gold-bugs (including myself) but after shifting the poles of power in a soft manner. I’m confident that one day when the paper manipulation in the market fails the prices for PMs might start soaring for a while but this is not going to be through China declaring her true gold reserves later this year but some time later. Moreover, I think that China too would not be interested to let the gold price go all the way up where mother nature might take it to, but rather take control over price formation just to control price suppression on her own, maybe this time not so bluntly as the FED-backed COMEX is now doing. That’as my take on it.
What I do fail to understand is how hyperinflation might start raging as long as there is NO other credible currency around. While on the face of it, it’s only clear that we have not witnessed hyperinflation yet following FED QE-series only through all that moneys being absorbed by stock, bonds and other virtual markets. But when the crash starts all that overinflated funds will be incinerated, so FED might just start inflating banking systems with new “liquidity” once again at zero-interest rates. Why could it be different this time? Thanks you

Not to dismiss you, but I’ve written for three hours today, with two more to go.

This is a lot to digest; and the gist of it is EVERYTHING is different today – regarding the global fiat Ponzi scheme, unprecedented debt, inflation, and currency volatility, and historically overvalued markets caused by weapons of mass financial destruction, the PPT, and QE.

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